Political News and Commentary from the Right

Some of that $50 billion of our tax money that was used to bailout General Motors last year is finally creating jobs – in Mexico. With the U.S. economy losing 131,000 jobs last month, General Motors announced last week that it will invest $500 million to produce a new vehicle and eight-cylinder engines in a plant in northeastern Mexico. The investment in the GM plant in Ramos Arispe, Coahuila state, would generate 390 jobs, according to a company spokesman.

In April, GM announced that it had paid back $8.1 billion in loans it received from the U.S. and Canadian governments. Of that, $6.7 billion went to the U.S. treasury. But U.S. Senator Charles Grassley (R-IA) said in a letter to the Securities and Exchange Commission (SEC) that a form filed by GM showed that $6.7 billion of the tens of billions the company received was sitting in an escrow account and available to be used for repayment. ”The bottom line seems to be that the TARP loans were ‘repaid’ with other TARP funds in a Treasury escrow account. The TARP loans were not repaid from money GM is earning selling cars, as GM and the administration have claimed in their speeches, press releases and television commercials,” he wrote.

Meanwhile, Ford Motor Company is reportedly having a banner year. Although Sen. Harry Reid (D-NV) claimed recently that Ford “would probably be gone” without the auto bailouts, Ford did not accept any of the billions of dollars in taxpayer-funded bailout money. Instead, Ford decided to make money the free market way, preemptively leveraging its assets and remaining afloat in exchange for debt.

Democrats have decided that in order to prevent Wall Street from starting more financial meltdowns, wrecking the economy and leaving the American taxpayer holding the bag, we need to give more oversight authority to the same government employees who were busy surfing Internet porn as private investors frantically tried to warn them about Bernie Madoff.

The Democrats’ financial “reform” bill also includes a $50 billion bailout fund — that’s million with a “B” — that will save the Democrats from the unpleasant task of having to go on record voting for another Wall Street bailout.

Under the Democrats’ bill, the FDIC will distribute the bailout money to Wall Street bankers without Congress having to take any action at all. (In the House version, the slush fund for the Democrats’ Wall Street friends is $150 billion.)

True, the billions of dollars will be doled out to banks for the purpose of “dissolving” them. So what? They’ll come back under a new name. But the guilty parties will lose no money for making bad bets — although if the bets paid off, they’d take all the profits. That’s what Democrats mean by “accountability.”

Not surprisingly, the only politicians opposed to a permanent bailout fund for bankers are the politicians not owned by Wall Street — that is, most Republicans, and one socialist, Bernie Sanders of Vermont.

The week between Christmas and New Year’s Day is usually a week when Americans slow down and take some time off. Kids are out of school, many companies are shut down or slowed down, and quite a few families are on vacation. Congress is even on vacation, minimizing the damage they typically inflict on the wallet of the American taxpayer.

This year the Obama administration took advantage of the holiday distractions to seize control of GMAC, the financing arm of General Government Motors Corp. This third bailout of the company that writes loans for Government Motors and Chrysler Corp. vehicles resulted in the US government increasing its ownership share of the company to 56.3%. This, of course, once more gives the Obama administration controlling interest in what had been a privately owned company.

When the Bush administration signed off on the first $6 billion GMAC received from the US taxpayer, officials in the former President’s Treasury Department considered it “part of a broader program to assist the domestic automotive industry in becoming financially viable.” But in May 2009, the Obama administration handed over another $7 billion in taxpayer wages to the beleaguered finance arm of what was soon to become the first US government owned auto maker.

The second bailout netted the Obama Treasury Department a 35.8% stake in the corporation, and an agreement GMAC would take on the additional liability of financing customers of Chrysler Corp. This followed almost immediately after the President took an 8% stake in Chrysler for the US taxpayer and handed over a 55% controlling interest to the unions.

Much of the initial money will go to help GMAC shoulder new lending responsibilities for Chrysler dealers and consumers after Chrysler’s government-orchestrated Chapter 11 bankruptcy filing last month. As part of the Chrysler reorganization, the government in effect dissolved Chrysler Financial and handed its business to GMAC, creating one big auto-financing arm that would service both companies.–WSJ, May 21, 2009

President Obama had already invested billions in Chrysler and plans to secure US government ownership of General Motors were in the works. Bailing out GMAC became an easy way to launder even more bailout cash to the President’s experiment with union and government ownership of former US industrial icons. As with other stones forming the foundation of Obama’s economic policies, funneling money to the automakers through loans to their customers didn’t prove too solid.

But that’s not something the President is willing to admit yet–that his policies for stimulating the economy have failed. No, his newest plan is to throw good money after bad and pile another $3.8 billion of YOUR money onto the still smoldering pile of waste known as GMAC.

The first $6 billion wasn’t enough to rescue the financial firm and its now-nationalized benefactors of its bad loans. The next $7 billion couldn’t save it, but did put Obama in control of 35.8% of the company. The second bailout also allowed the President to twist the arm of the company and force it to agree to loan more money to customers of GM, which Obama would soon nationalize, and Chrysler, which the President had recently handed over to his union backers.

Though neither of these bailouts accomplished their (supposed) goal, our omnipotent, omniscient oracle Obama, in his infinite wisdom, has determined the solution to the problem is to pour more of your hard-earned tax dollars into the bankrupt corporation, $3.8 billion more. But don’t worry! The President who brought us $1.4 trillion deficits and a $12 trillion national debt has traded our greenbacks for a controlling interest in the company.

That’s right. We now own 56.3% of a company that can’t attract private capital because it can’t manage to stem the flow of red ink from its books. A company that cannot, on its own merits, attract private capital. President Obama is forcing all American taxpayers to borrow money to purchase a portfolio of profitless companies controlled by politicians and bureaucrats.

So congratulations taxpayers! Like it or not, you own yet another failed corporation run by Chairman Obama.

First President Bush, then President Obama poured billions into General Motors and Chrysler to keep the companies alive but barely breathing. That was just for starters. Next came Obama’s creation of an Auto Task Force to oversee the auto companies. To head the task force, the president picked Steve Rattner, a Wall Street investor with no experience in automaking but lots in raising campaign money for Obama and Democrats.

GM and Chrysler were quickly restructured, mostly to the benefit of the United Auto Workers, the union which spent millions in 2008 to elect Obama and Democrats. The UAW now owns 17.5 percent of GM and 55 percent of Chrysler–quite a return on an investment of zero dollars. Obama said all parties should “sacrifice,” but only bondholders did. They got a fraction of what they were legally entitled to receive. UAW retirees, in contrast, got a gift of $9.5 billion at GM and $14.2 billion at Chrysler.

There’s an epilogue. Delphi, the auto parts manufacturer once owned by GM and still its biggest supplier, has been in bankruptcy for four years. To acquire its assets and run the company, Delphi and Obama’s Auto Task Force picked an affiliate of the private equity firm Platinum Equity. There was no auction or competitive bidding, though Platinum stands to make millions in the deal. Why Platinum? The UAW favored it, sources said.

There’s a name for all this: crony capitalism. Obama insists he believes in capitalism, but it’s not the free market variety that he’s been promoting since he became president. Obamanomics is a different strain entirely.

Within a matter of weeks, the great state of California will be out of money. For months state leaders have warned of the yawning $24 billion budget deficit; even exploiting the deficit they created in a failed attempt to scare voters into increasing their taxes in the May special election. The proposed tax increases and budget gimmickry were soundly rejected by voters, sending a clear message to Sacramento that Californians will no longer finance the bloated, inefficient government’s insatiable appetite for more tax dollars. Now the day of reckoning is upon California, and how the Golden State resolves this massive problem will impact the entire nation.

…

The fate of the world’s 10th largest economy is inextricably linked to America’s overall economic fate. Could America’s already fragile economy absorb California’s debt? With the federal government already trillions in debt, what’s another $24 billion? The problem is not the amount of debt, but the precedent it will set if the federal government is forced to bailout one of the country’s largest states.

So said President Obama’s new Chairman of the Board of Uncle Sam’s newest acquisition, GM. Edward E. Whitacre, Jr went on to say “A business is a business, and I think I can learn about cars.” Under that premise, a successful hot dog vendor on the streets of New York could lead the board for the bankrupt money pit American taxpayers just invested in.

Whitacre retired from AT & T in 2007 after 44 years with the company. Though the last 17 years he served as CEO and Chairman of the Board at the telecom company, his first job at what was then Southwestern Bell was setting fence posts. Without a doubt, he started at the bottom and worked his way to the top. But telecom analyst Victor Schnee calls his appointment to lead GM “bizarre.”

White House Press Secretary Robert Gibbs explained, “What was required was somebody with savvy, big-business experience that could take a company, change its management culture, make some of those tough decisions to put it on that path toward viability.” But how does Whitacre’s experience at AT & T compare to that required to turn around the new Government Motors?

At AT & T, he started with the smallest of the “Baby Bells” and gobbled up its competition in mergers to create the largest US telecom company. Along the way, competitors cried foul, accusing the ever-growing AT & T of using its might to price them out of business and ignoring regulations smaller companies had to abide by. In reference to a 2001 complaint filed by the Competitive Local Exchange Carriers (CLEC) Association of Michigan, then CLEC-MI president Brad Kruse said “Companies are limited in the service they can provide in Michigan because of SBC/Ameritech’s (now AT & T) actions, and the pace of competition is slowing. SBC/Ameritech is unilaterally setting telecommunications policy in Michigan, disregarding the rulings of regulators and the policies set by legislators alike, while blocking competition.”

Could this be exactly what the administration seeks for GM? A go-for-the-jugular Government Motors bent on crushing competition. Might we see the taxpayer-bought-and-paid-for bankrupt company buy out the smaller Chrysler then use its government backing to try and drive Ford Motor Co. (Which by the way is the only American auto company that didn’t take a taxpayer bailout.) out of business? If so, and if successful, Obama will have accomplished the nationalizing of the entire American auto industry! Why else would he choose a Chairman of the Board who, in his own words, doesn’t know anything about cars?

Could the administration’s motivation have been political? Mr. Whitacre made a lot of political contributions in the ’08 election cycle, mostly to Republicans. But one donation, in February of 2007, might raise an eyebrow when one’s asking how Whitacre was chosen for his new job–$1000 to Rahm Emanuel, President Obama’s current Chief of Staff. The natural question is, what would cause a Texas Republican to donate to the campaign of a Democratic Congressman in Illinois? On the same day Whitacre made his suspicious donation, AT & T’s COO Randall Stephenson also contributed $1000 to Emanuel’s campaign. Coincidence? Maybe.

On May 1 of this year, the Wall Street Journal reported that Emanuel has taken a lead role at the Treasury Department and if “Rahm wants it” it’s almost certain to happen. Just a couple of days ago Kevin Hasset, in a piece on Bloomberg, opined that he believes Obama’s plan is to put policies in place that drive every American business to need a bailout, and then “Rahm Emanuel can stack the boards of all of our companies with his political cronies.” Perhaps the idea that Whitacre’s appointment, who knows nothing about the auto business by his own admission, to head the new Government Motors is political payback by Rahmbo isn’t so far-fetched.

In either case, if Obama’s seeking to completely nationalize the entire auto industry with the “Kingpin” of the telecom industry or if Rahmbo made the call to pay off a favor, the fact that Whitacre steps into the limelight announcing he knows nothing of the business doesn’t allay my fear that this “investment” is going to be one big boondoggle.

WASHINGTON — “I,” said the president, who is inordinately fond of the first-person singular pronoun, “want to disabuse people of this notion that somehow we enjoy meddling in the private sector.” He said that in March, when the government already owned 80 percent of AIG, Fannie Mae and Freddie Mac. “When a difficult decision has to be made on matters like where to open a new plant or what type of new car to make, the new GM, not the United States government, will make that decision.” But the government is GM’s largest shareholder, customer, tax collector, regulator, partner in determining employees’ compensation, protector of dealers and pension guarantor. GM’s other large owner, the United Auto Workers, is increasingly a government dependant.

Yet Steve Rattner and Ron Bloom, two of the president’s fixers of Detroit, recently wrote in USA Today that government “will play no role” in running GM. They were not under oath.

“What we are not doing — what I have no interest in doing — is running GM,” says the president who, when not firing GM’s CEO, purging its board of directors and picking new members, is designing new products (imposing fuel economy requirements that will control size, weight, passenger capacity and safety). The president, overcoming his professed reluctance to run GM, resembles the journalist Don Marquis when, after a month on the wagon, he ordered a double martini and exclaimed: “I’ve conquered my g**d** willpower.”

Washington mandates that Detroit must build cars for which there is much less demand than Washington demands that there be. Then Washington tries to manufacture demand with a $7,500 tax credit for purchasers of the electric Chevrolet Volt, supposedly GM’s salvation. So, GM is to be saved by a product people will not buy without a cash incentive larger than the income tax paid by 83.4 percent of America’s families.

Get ready folks: America is about to own a car company. As of Monday, we the taxpayers will own more than 70 percent of GM. Whether the company will be formally renamed Government Motors remains to be seen. But that’s what it will be.

Instead of putting the failed car enterprise into bankruptcy six months ago — where Carl Icahn or Wilbur Ross could have bought it — the Bush administration chose Bailout Nation. Under Team Obama, that bailout has morphed into full-scale government ownership. Twenty-billion dollars of TARP money is already invested in GM, with another $50 billion on the way. And that number could easily double unless GM car sales miraculously climb back to 14 million this year. That’s highly unlikely, with car sales presently hovering around 9 million a year.

In other words, taxpayers are not going to get their money back. Yes, we the people will be left holding the bag for the mistakes of GM’s management and labor leaders over the last four decades.

The government’s plans include giving stakes in the new company to GM’s union and bondholders, although the ownership structure of the company is still being negotiated, said the source who is familiar with the company’s plans.

In other words, the Obama administration plans to purchase the bankrupt, defunct manufacturing Goliath before it really knows what it will do with it. The Reuters source wouldn’t specify a purchase price, which leads one to believe the American people will be infuriated if “the most transparent administration in history” discloses what it’s willing to pay to purchase the ruins of this former pillar of American industry.

You may recall President Bush approved a $13.4 billion emergency loan for GM last December. Sorry, but you loan money only when you expect it to be repaid. At the time, many of us recognized that GM had already fallen too far, that the American taxpayer was forfeiting funds we would never recover. Now, it’s apparent we were correct.

In addition, the government would extend a credit line to the new company and forgive the bulk of the $15.4 billion in emergency loans that the U.S. has already provided to GM, the source said.

Imagine that!

Merriam-Webster’s Online Dictionary gives the following definition for Socialism.

Socialism–any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods

Anyone still denying where we’re headed with Obama’s economic policies?

I can’t help it, I have to say it! I told you so! After the “Bailout Bill for the Big Banks” was passed, I knew there would be no end to people, businesses and entire industries standing in line with their hands out and pockets empty.

Well, the latest industry to call on Congress for a $5 billion bailout doesn’t have empty pockets–they don’t have any pockets at all! The newest bunch of solicitors seeking your hard-earned money have employees who don’t even wear clothes to work. Who are they?

The publisher of Hustler magazine, Larry Flynt, and the CEO of Girls Gone Wild, Joe Francis claim that porn is a vital American industry that deserves a taxpayer bailout too! Flynt goes so far as to claim that failure to dole out government dollars to shore up the smut industry would present a danger to the health of the nation.

“People are too depressed to be sexually active,” Flynt says, “This is very unhealthy as a nation.* Americans can do without cars and such but they cannot do without sex.”

*emphasis added

If that’s not depraved enough to convince Congress that the US will fail to exist as we know it if naked men and women are forced to stand in unemployment lines, try this–Congress has a duty to make Americans horny according to Flynt!

“With all this economic misery and people losing all that money, sex is the farthest thing from their mind,” Flynt says, “It’s time for congress to rejuvenate the sexual appetite of America.* The only way they can do this is by supporting the adult industry and doing it quickly.”

*emphasis added

This would be funny if I was certain the Democratic controlled Congress wouldn’t stoop so low as to take money from my pocket to fill the G-strings of these poor men and women who suffer so much in this economy that they must resort to rubbing their naked bodies over other hot young bodies in order to make a living. Since I’m not convinced, it’s depressing.

Francis wants Congress to empathize with the American citizens who patronize the porn industry. How will these citizens of our country survive if something so near and dear to their heart as their nudie magazines and XXX videos suddenly became unavailable?

Francis says, “Its [porn’s] emergence into the mainstream of popular culture suggests that the US government should actively support the adult industry’s survival and growth, just as it feels the need to support any other industry cherished by the American people.”*

*emphasis added

You don't want her on food stamps do you?

I know what you’re thinking: Surely the Democrats wouldn’t stoop so low as to tax dollars in the pockets G-strings of the porn kings and queens? Okay, what if I told you these brokers of smut contributed heavily to the campaigns of well known democrats?

According to this article, Obama’s campaign received $1000’s from gay porn baron Terry Bean. Larry Flynt contributed $1000’s to Congressman Dennis Kucinich (D-OH) and the Democratic National Committee. Joe Francis donated $4000 to Senator John Kerry (D-MA) in 2004. We’ll have to watch how these two Democrats vote on the upcoming “Save the Smut Sales Bill.”

This won’t be the end. I don’t know what could top this request for our hard-earned dollars to shore up smut in America, but you can bet there will be more and more grovelers for the manna taken from hard working Americans to line the pockets and G-strings of incompetent, irresponsible CEO’s of inefficient and ineffective companies.

Work hard America, then work harder and remember you are your brother’s and sister’s keeper–even if your brother and sister make their living having sex with farm animals.